While cleaning up my office recently, I rediscovered a book that was given to me several years ago by a client. The book is entitled, 1001 Ways to Reward Employees, by Bob Nelson.

When I originally read this book, I used some of the material for a speech about motivating employees.

The point of the book – and my speech – is that money isn’t everything with regard to motivating employees. In fact, over the long haul, while competitive financial compensation is important, truly motivating employees requires that you successfully practice a variety of management techniques that are not financially related. Nelson’s book lists proven low cost strategies on how to reward employees via contests, achievement rewards, time off, and even praise.

Yes, praise. Praise is the simple act of catching someone in the act of doing something good, and telling them that you appreciate what they do. Look for opportunities to thank people for going out of their way to serve your customers. Or remember periodically to thank them for simply doing their job well every day.

I am absolutely amazed at the power of words to encourage and exhort people. The power of the sincere thank you for a good effort is amazing. You can make an astounding impact when you recognize employees who have made a personal sacrifice to ensure that a key customer got his order. The loyalty that can be created by you personally thanking someone for a job well done – by taking them to lunch, for example – can be remarkable. And it can stand the test of time.

By the way this works just as well in your home life. It is amazing how well children respond to compliments and being thanked and appreciated. The same applies to your interactions with your spouse or your significant other.

In my work with business owners over the years, I am often amazed at how many owners do not practice any form of non-financial compensation. They have reduced all rewards within the business to the annual ritual of merit raises and year-end bonuses.

The truth is that the economic return on the traditional merit raise and bonus is significantly less than the return on the non-financial rewards that an owner can use throughout the year.

A Gallup study that has been updated annually for over thirty years indicates that people quit managers, not jobs. Their data shows that people make the decision to stay or leave jobs based on the non-financial elements of the position. In other words, high performance and employee longevity is not nearly as tied to the financial rewards of the job as you may think.

The most important factors in retaining and motivating employees are creating an environment where they feel valued and appreciated. If you demonstrate to your employees that you value them in the little things, you will gain their loyalty and appreciation.

By the way, I am not suggesting that you do these things with that end in mind. Rather, recognize that when you do these things sincerely, you will reap the benefits. I am also not suggesting that rewarding employees in non-financial ways is a substitute for paying your employees fairly.

Here are several great ideas from the book that are easy to implement. (Buy the book. It’s only about ten bucks!)

  1. Compliment someone. Not in a big meeting or in front of a lot of people. Simply walk up to them and say, “Thank you for doing…” You can even thank them for being at work each day and for being dependable!
  2. Paid time off is one of the greatest rewards. Set a goal, and if it is achieved, give everyone an additional paid day off. Next time you ask them to do something extra, it’s likely that they will willingly jump in!
  3. Run a simple contest tied to an important objective. Perhaps it is the number of new customers for the month or unit sales for a new product. If the goal is hit, the whole department gets free pizza for lunch.
  4. Take one of your staff to lunch each week. Ask them their opinions about the business and listen to their ideas. Commit to seriously consider their ideas.
  5. Reward customer service. Recognize it publicly. Acknowledge it in front of everyone. Give out a gift certificate for a restaurant or tickets to a sporting event for outstanding customer service.
  6. If you have season tickets in a great section, allocate 20% to reward employees caught in the act of doing something good. Giving these tickets to your employees will get you more business than most of the ones you give to clients.
  7. Same as number one. Learn to say, “Thank you.” Most people will do almost anything for you if they are appreciated and get a compliment.